Accounting Cycle: Steps of the Cycle

Which of the following refers to the time frame when certain accounting transactions occur?

• Recording cycle

• Accounting cycle

• Transaction period

• Accounting period

Which of the following is a public document which shows a company’s assets and liabilities?

• Balance sheet

• Income statement

• Statement of cash flows

• Statement of retained earnings

Which of the following financial statements shows how profitable a company is during a certain accounting period?

• Balance sheet

• Income statement

• Statement of cash flows

• Statement of retained earnings

Which financial statement can a stakeholder use to tell the value of the business and it's ability to pay its debts.

• Balance sheet

• Income statement

• Statement of cash flows

• Statement of retained earnings

Which of the following financial statements shows the revenue and expenses during a certain accounting period?

• Balance sheet

• Profit & Loss (P&L) Statement

• Statement of cash flows

• Statement of retained earnings

Which of the following account types is closed at the end of the accounting cycle?

• Debit accounts

• Liability accounts

• Permanent accounts

• Temporary accounts

The first step of the accounting cycle is ___________.

• arrive at post closing trial balance

• prepare worksheets and financial reports

• analyze transactions

• record journal transactions

At the end of an accounting cycle, after posting unadjusted trial balances, some accounts may need updated such as revenue, expenses, or supplies. This step of the accounting cycle is ______________.

• arrive at post closing trial balance

• prepare worksheets and financial reports

• analyze transactions

• record and post adjusting balances